March 18, 2009
A.I.G.

Posted by Jim Lichtman | Comments

Early in my career, I would read the morning papers and make a list of those organizations that were facing ethical crisis.  I’d then write a letter addressed to both the president of the organization as well as the head of Human Resources offering my services.

I must have contacted at least a hundred corporations, associations or other organizations in an effort to help them navigate the waters of “what-do-we-do-now.”  Despite follow-ups, only one corporation took me up on the offer.  I later learned that the reason this group contacted me was because it was mandated in an agreement they made with the government in order to avoid further penalties.

To their credit, this company took ethics seriously.  As instructed, they implemented an on-going, company-wide ethics program that was continually updated with employee-based scenarios surrounding issues that had come up during the year.  In tracking calls to an internal, anonymous hotline, they discovered a measurable shift away from whistleblower calls to more consultative calls; the kind that asked, “Here’s our situation, what’s the best way to handle it?”

One of the program’s key benefits was a greatly increased level of trust among employees and management.  People felt that they were being treated more fairly, and with a greater degree of respect than previously.

This was the exception.

In most of the follow-ups with troubled organizations, the president's office would usually tell me that everyone’s too busy handling all the legal issues due to the current crisis to look at any ethics training at this time.  Top executives were so focused on the brushfire of the moment, that they rarely spent time looking into any long term changes within.

The president’s office of a Washington, DC-based group contacted me a few years ago about a company-wide training program because the time he spent dealing with all the ethical indiscretions was taking time away from his real work. 

After an initial conversation, I was assured of complete support and cooperation in implementing a top down series of training sessions.  After talking to several key people including the head of H.R., I came back with an outline of what would be covered and how it could be implemented. 

Around the same time, however, the president had fired off an angry memo to all staff indicating his displeasure with all the unethical activities.  It wasn’t long before all the indiscretions stopped.  Within a short time, interest in the training progam stopped as well.

Although I had cautioned many at the beginning that this was likely to occur, they assured me that they were committed to the training.  “We don’t want to have to go through all this again,” a person close to the president told me.

However, once the behavior stopped, their interest stopped.

Quite simply, ethics is the infrastructure for how things should work.  But, it’s not like filling a pot-hole.  If ethical issues are not dealt with in a comprehensive, on-going manner, whatever problems occurred in the past will show up again.

So, what can I say about the $165 million in bonuses paid out to executives at insurance giant A.I.G. with taxpayer bailout money that hasn’t already been said?

Without a strong commitment to repairing our ethical infrastructure, we are destined to see more abuse.

 

 

  Reader Comments

 

Comments by Frank, Santa Barbara, CA - March 18, 2009

You are right about clarity and follow-up. The rules must be clear and someone must be watching. Infractions must be dealt with. Today, the top dog, the prize winner, the mother of all heroes is... greed. The Lone Ranger would be devistated, were he to ride today.

Follow-up by Jim - March 20, 2009

You might want to read more about the Lone Ranger in my "post" in July of last year.

 
 
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